Feds halt operation that collected on phantom payday loan 'debts'

The Federal Trade Commission announced a U.S. district court has halted an operation based in Cleveland and Atlanta that “allegedly used deceptive and threatening tactics to collect phantom payday loan 'debts' that consumers either did not owe, or did not owe to the defendants.”The court order “freezes the defendants' assets to preserve the possibility of providing redress to consumers, and appoints a receiver,” according to the FTC.The FTC's complaint and request for a temporary restraining order were filed in the U.S. District Court for the Northern District of Georgia, in Atlanta. The court granted the request on Thursday, Oct. 24.Defendants operated under fictitious business names “that implied an affiliation with a law firm or a law enforcement agency,” the FTC said. “Using robocalls and voice messages that threatened legal action and arrest unless consumers responded within a few days, the defendants have collected and processed millions of dollars in payment for phantom debts,” according to the complaint.Their practices have generated almost 3,000 complaints to the FTC's Consumer Sentinel.A typical message went like this, according to the FTC:“This is the Civil Investigations Unit. We are contacting you in regards to a complaint being filed against you, pursuant to claim and affidavit number D00D-2932, where you have been named a respondent in a court action and must appear. There is a contact number on file which you must call, 757-301-4745. Please forward this information to your attorney in that the order to show cause contains a restraining order. You or your attorney will have 24 to 48 hours to oppose this matter.”Working out of offices in Cleveland and Atlanta, the defendants “threatened consumers that if they did not pay, their bank accounts would be closed, their wages would be garnished, they would face felony fraud charges, they would have to appear in court thousands of miles from their homes, or they would be arrested at their workplace,” according to documents filed with the court.The complaint charges the defendants with violating the FTC Act and the Fair Debt Collection Practices Act by falsely telling consumers that they were delinquent on a payday loan or other debt that the defendants had the authority to collect; that they had the legal obligation to pay the defendants; that they would be arrested or imprisoned if they did not pay; and that the defendants had taken or would take legal action.The FTC's complaint names five individuals — Lisa J. Jeter, Nichole C. Anderson, Hope V. Wilson, Angela J. Triplett, DeMarra J. Massey — and the following companies: Pinnacle Payment Services LLC; Velocity Payment Solutions LLC; Heritage Capital Services LLC; Performance Payment Processing LLC; Credit Source Plus LLC (Ohio); Credit Source Plus LLC (Georgia); Reliable Resolution LLC; Premium Express Processing LLC (Ohio); and Premium Express Processing, LLC (Atlanta).

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